BOZEMAN, Mont. — A new housing project near Fowler Lane is set to bring 296 workforce housing units to Bozeman as developers push to add more below-market rentals in one of Montana’s most expensive housing markets.
Rocky Mountain Flats uses low-income housing tax credits, or LIHTC, to help fund construction. BlueLine Development and the Human Resource Development Council broke ground on the project a few weeks ago.
The complex is planned with two four-story buildings and one five-story building. It will also include a picnic area, a dog park and a playground, along with one, two, three and four-bedroom units.
Lila Fleishman, HRDC's community development director, said the size of the project was key to making LIHTC work.
“To make those projects work you really have to have scale, which is why it's such a large project. And that helps cover some of the costs that you need to build and then rent below market,” she said.
Fleishman explained the units are expected to serve income earners at about 30-70% of the area median income.
Based on the current numbers from the City of Bozeman, a single person making up to $53,000 a year could qualify. A couple making up to $61,000 or a family of four making up to about $76,000 a year also could qualify for the rentals.
Fleishman said larger units could fill an important need for families looking for affordable housing.
“Those are really unique. It's very challenging for larger household sizes to find housing that's affordable for those income ranges. So, I think the demand will be quite high for the people that that works for them, right?” she said.
The latest annual report from the Southwest Montana Realtors' Association found rents for different unit sizes had risen sharply over the past several years. The report also showed the median-earning household in Gallatin County fell below 100 percent on the affordability index in 2023, meaning median income earners could not afford rent without financial stress.
“Generally, there's a lot of demand for housing that's below market. The market for rental housing and the wages that local households are earning puts a lot of strain,” Fleishman said.
Because the project used LIHTC funding, the units are set to remain rent-restricted for the foreseeable future.
Across Bozeman, more than 1,000 affordable units are either under construction or in the review process.